Gov. M. Jodi Rell’s deputy budget director unveiled a new plan today to shave $300 million off annual pension costs by boosting worker contribution rates, raising retirement ages and developing a new 401 (k)-style retirement plan for new employees.
The proposals, offered to the governor’s Post Employment Benefits Commission, were part of a larger plan to stabilize the Connecticut’s severely under-funded pension program that also includes an end to retirement incentive programs and larger annual contributions by state government.
“As a long-term strategy it seems to make sense, to introduce some stability,” Michael J. Cicchetti, deputy secretary of the Office of Policy and Management and chairman of the commission, said during this afternoon’s meeting in the Legislative Office Building.
Cicchetti, whose group is expected by mid-September to issue a blueprint for stabilizing retirement benefit programs, also called for new restrictions on retiree health benefits, including an end to coverage for vested state employees who leave for private-sector jobs before retirement.
Rell has said she hopes the commission’s recommendations will offer her successor and the 2011 General Assembly a path to closing huge funding gaps in retirement benefit programs.
But most of the recommendations offered today to the commission also would require approval of state employee unions. And commission member Salvatore Luciano, a veteran state employee union leader, predicted labor would object to most of these proposals.